CII unveils action plan for eight percent growth

Industry and the government can work together as partners to help India achieve an eight percent sustained growth from 2007, Anand Mahindra, the new chief of the Confederation of Indian Industry (CII), said on Wednesday.

NEW DELHI: "While recognising that the government is relevant for reforms, we need to align the stakeholders and work backwards to achieve higher growth," Anand Mahindra told a press conference after taking office.

Taking a cue from U.S.-based management guru C.K. Prahalad, Mahindra said: "We are going to focus on aspirations and not lack of resources."

Looking at 2003-10, Mahindra said it was not unrealistic to expect a higher gross domestic product (GDP).

"This would call for an industrial growth of 11 percent with the share of industry in GDP increasing from 26 percent currently to 33 percent. The exports would have to grow from $51 billion to $103 billion in 2010, and the foreign investment would have to grow from $4 billion to $24 billion by then."

While not minimising the role of government in providing better infrastructure, particularly in power sector, and facilitating private sector investment, Mahindra said the industry would have to play a more pro-active role to "build Indian multinational companies (MNCs)".

"Indian companies are past the stage of survival and are moving to build Indian MNCs," he said.

To help more firms achieve this objective, CII has identified eight drivers including organising the unorganised sector, leveraging Indian advantage of competitive and quality goods and services, and a new approach to customer access by making the goods more affordable in the domestic market to reach out to the rural masses.

Among other initiatives, Mahindra said, there would be increased focus on making the small and medium enterprises more competitive and agriculture more paying to spur growth.

On the overseas front, with exports expected to bring in most of growth, CII was keen on Indian exporters capitalising on 18.5 percent growth in 2002-03 that ended on March 31 despite an uncertain global scenario.

To help Indian industry scout for opportunities, CII was planning to open an office in Iraq, he said.

China, Russia, Malaysia and Switzerland are other destinations where CII would open offices this year.

"Instead of seeing China as a threat, we have decided to embrace the dragon. Given the size of our market, the choice is not India versus China but India and China," said Mahindra.

While maintaining that for 2002-03 the CII has not scaled down the expectations of five percent growth despite the Central Statistical Organisation downgrading prospects to 4.4 percent growth due to a severe drought last year, Mahindra said in 2003-04 expectations were of 6.0-6.4 percent growth.

"In agriculture, despite a lower than normal monsoon forecast, we are expecting between two to four percent growth. This has to happen as after the dip last year, we expect to grow from that low point.

"Overall the outlook is good with industry expected to record 6.5 percent growth same as this year, services sector 5.4 percent growth and exports looking up," said Mahindra.

If a higher than seven percent growth was achieved in 2004-06, CII estimates that the GDP would grow to a level where wider customer base would push up demand and help India achieve over eight percent growth.